The Final Option
In previous posts (Funding Long-Term Care ) we have been discussing the ways to pay for extensive palliative care...i.e. that is, when the patient is no longer improving, but is slowly declining, and is losing functionality, such as the ability to feed one's self, to use the toilet, bathing, etc. These things in themselves are not immediately life threatening, as long as assistance is provided by someone else. This level of care is quite expensive, but the bills must be paid in order for the care to continue. There are three ways to pay for this type of care:
1. Long-term care insurance
2. Self funding
3. Government assistance (Medicaid)
In the past two posts we've considered options 1 and 2. Both of these alternatives require some level of available funds, either in the ability to afford LTC insurance premiums, or to shoulder the costs yourself.
The third option is the last-resort scenario; the use of government assistance in the form of Medicaid.
"I'm from the government and I'm here to help you."
Ronald Reagan once said that, "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"
Many of the folks I interview, when the subject of long-term care comes up, just naturally assume that either (1) the problem will only occur to someone else, or (2) the government will pay for it, probably by Medicare. Statistically they're wrong on number one, and they're in for a big surprise on number two.
Medicare only pays for care when the patient outcome is expected to be a full recovery. In the event of palliative care, Medicare reimbursements are suspended. That leaves government assistance, or Medicaid to pay the bills. Here's some points you need to know:
* Medicaid will not pay if you have assets.
The law in NC (and is very similar in most other states) is that you must spend down your assets first before Medicaid will kick in. Current law allows you to keep $2000 ($3000 for couples) and a very small portion of your income. Medicaid will consider all liquid assets including bank accounts, stocks, bonds, mutual funds, retirement accounts, notes, and trusts; personal property including motor vehicles and mobile homes; life insurance, burial contracts and annuities, and real estate as candidates for a spend-down. Your home and one car are exempt.
* You cannot give away assets to your children to qualify for Medicaid.
The look-back period for Medicaid is 5 years. Medicaid imposes a penalty of one month for every $6,300 of gifts made within the look-back period. Medicaid totals gifts made during the 5 years before the Medicaid application, divides the total gifts by the penalty divisor, and the result is the number of months that the applicant will be ineligible for benefits.
Example: For example, in North Carolina the average monthly cost of care has been determined to be $6,300. If you give away property worth $63,000 to your child, you will be ineligible for Medicaid nursing home benefits for 10 months ($63,000 / $6,300 = 10).
* Your choices for care on Medicaid is limited.
Medicaid will almost always require institutional care. Home health care, and even assisted living arrangements, most likely won't be paid by Medicaid. What that means for most folks is that they're off to a nursing home, whether they like it or not, and not a private room, either. Once you become a ward of the state, your ability to make your own life choices largely disappear.
Reagan was right. The level of care that the government provides may be slightly less than you'd prefer.
The Ugly Option
Medicaid is the ugly option of the three. That's one reason why assembling a plan for your care now is so important. Statistically, over 60% of Americans in nursing homes are having their bills paid by Medicaid! You'll get the care you need, but it might come at the price of your family assets, and personal freedom. Do you want your final years determined by a Medicaid bureaucrat, or by you and your family? Take charge of your own future and get going on a long-term care plan asap.
Also...a good Elder-Law Attorney can go a long way in offering peace of mind from the spectre of Medicaid. NavStar has a relationship with a great one, Natalie Miller JD. Give us a shout and we can get you going on a bulletproof long-term care plan.
Until next time,
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